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Barack Obama's Health Care Plan and How it Affects Employers

Will Obama Require Small Business Owners to Provide Health Insurance?

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How Barack Obama’s Health Care Plan Could Affect Women (and other) Business Owners

More women own small businesses in the form of sole proprietorships than any other type of business structure. If you have employees, you should understand how Barack Obama's health care plan would and would not affect your business.

But both John McCain and Barack Obama have made misstatements, and in some cases, even lied about their opponent's health care plans. So how do you know truth from fiction? Who's plan would have the greatest impact and cost the most?

Women in Business presents the facts on Obama's proposed plan and what it means to business owners.

Obama's Health Care Plan

The health care plan proposed by Obama is lengthy, but does not always provide in-depth information. However, there are three key areas women in business should understand about the proposal because it could affect your business.

Three key aspects of Obama’s proposed health care plan that would affect business owners are:

  1. Employer Contribution to Health Care Costs: Employers that do not “offer or make a meaningful contribution” to provide of help cover the cost of health care benefits for their employees will not get off for free.

    Employers that do not provide or substantially contribute to their employee’s health care, will be required to pay a percentage of their payroll to the government as a contribution to the national plan. This would not be an optional contribution and no guidelines have yet been offered as to what that payroll percentage contribution would be.

  2. Small Business Exemption: Obama’s plan exempts small businesses from the requirement to provide health care benefits or contribute to the costs of the national plan.

    There have been no guidelines presented yet as to what constitutes a “small business.” However, if the guidelines applied by the Small Business Administration were used, the definition of “small business” is still vague (and has been redefined many times over the past ten years):

    “The Small Business Act states that a small business concern is "one that is independently owned and operated and which is not dominant in its field of operation." The law also states that in determining what constitutes a small business, the definition will vary from industry to industry to reflect industry differences accurately. SBA's Small Business Size Regulations implement the Small Business Act's mandate to SBA. SBA has also established a table of size standards, matched to North American Industry Classification System (NAICS) industries.”

  3. Small Business Health Tax Credit: Small business owners would receive a new “Small Business Health Tax Credit” in order to help reduce the costs incurred by small businesses who offer health care benefits. This incentive would be in the form of a refundable tax credit of up to 50 percent on premiums paid by small businesses on behalf of their employees.

The Costs Vs. Benefits of Obama's Health Care Plan

Obama's proposed plan would cost $1.6 trillion over the next ten years, however, it makes provision for relatively low-cost insurance that would be available to everyone. His plan would offer insurance through non-group pools and subsidize premiums for low- and moderate-income households.

Obama's plan would cover virtually all children (note one of the key points in Obama’s plan is to make health care coverage mandatory for all children under age 18) and many currently uninsured adults.

It is projected that Obama’s plan would reduce the number of uninsured children and adults by 18 million in 2009 and 34 million by 2018.

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